Deal ID is a relatively new buzzword, and a topic OpenX gets asked about frequently. What is it exactly, and why is everybody talking about it?

To get the best possible answer, I asked Paul Sternhell, one of our go-to OpenXers for explaining the ins and outs of OpenX Programmatic Direct solutions.

Starting with the basics, what is a Deal ID?

According to Paul, “it’s a unique code that’s used to identify a pre-negotiated deal between a buyer and a publisher.” Deal IDs are used to facilitate Private Marketplace transactions, which typically come in two flavors: fixed-price Preferred Deals and variable-price Private Auctions.

Why are Deal IDs used?

There are lots of reasons why publishers and advertisers like Private Marketplaces, which combine a direct relationship between buyer and seller with programmatic execution, including significant efficiencies gained on both sides. The presence of a Deal ID in a bid request enables the buyer to recognize it as one originating from a publisher with which it has pre-negotiated arrangement, and treat it according to the agreed-upon terms.

Deal IDs are also essential for reporting between the buyer and seller. They allow publishers to track campaign spending in near real time, as well as provide the advertiser up-to-date insight into available inventory.

The Deal ID is typically generated by the platform through which the deal will be executed, for example an advertising exchange or SSP. The ID itself doesn’t include any specifics on the arrangement (i.e. the ID itself won’t reveal any agreements with regards to content, data packages or price floors); those details are stored in the platform where the ID was generated.

We hear the term Deal ID a lot these days because programmatic trading is permeating into the direct-sales channel. Advertisers want access to premium inventory – and they’re willing to pay for it – but they want to be highly selective in the impressions that they buy. Today we see arrangements where buyers get access to additional data about users, more specific information about ad placement, or the right of first refusal. For their part, publishers are happy to offer premium inventory programmatically, but need some kind of assurance in return, such as a fixed CPM or higher floor than would be present in an open exchange. A Deal ID is the mechanism that enables these types of Private Marketplace deals.

Going forward, you should expect to hear a lot more about Deal IDs, since preferred deals and private auctions are on the rise.